Morgan Stanley's 'Top Pick' Already Popular in Options Pits

The chip stock is surging following the brokerage's comments

Digital Content Manager
Aug 14, 2023 at 2:59 PM
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Nvidia Corp (NASDAQ:NVDA) stock is up 6.2% to trade at $433.84 last check, after Morgan Stanley named it a "top pick" before its earnings report, which is due out before the open on Wednesday, Aug. 23. The analyst cited NVDA's recent selloff, which created an attractive entry point for investors amid a shift into artificial intelligence (AI) spending. 

The security has run into resistance at the $440 level, while the 20-day moving average has been acting as a ceiling as well. The shares are not too far off their July 18, all-time closing high of $478.95, though, and boast an impressive 197.2% lead so far in 2023.

NVDA 20Day

This price action has not gone unnoticed by options traders, as the stock is on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that attracted the highest weekly options volume during the last 10 days. The equity saw 5,525,497 calls and 4,719,627 puts exchanged. The weekly 8/11 410-strike put was the most popular contract in that time period.

NVDA 0814 2

Short-term options traders have been much more bullish than usual. This is per Nvidia stock's Schaeffer's put/call open interest ratio (SOIR) that ranks higher than just 2% of annual readings. 

These options traders are in luck, as the equity's Schaeffer's Volatility Scorecard (SVS) sits at 84 out of 100. This implies the stock has exceeded option traders' volatility expectations over the past year.


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